External reserves improve by $18m in 1 week as crude oil prices rise

Nigeria’s external reserve has added $18 million in one week following an increase in the prices of crude oil which has hit highs not seen in four weeks.

National Daily gathered that the country’s reserves which had been on a steady decline rose marginally from $27.808 billion last week, compared with $27.790 billion it attained the previous week.

Commenting on Nigeria’s external reserves position, CSL Stockbrokers Limited, in a report noted that what was more interesting is that the level of reserves in terms of goods import cover had been steady if not rising gradually over recent months.

This, the firm attributed to the fact that imports had been contracting, revealing that the 12-month moving average of goods imports in the country is presently at 5-year low.

“The steadiness of import cover is not a positive sign as the decline in imports is reflective of the economic slowdown. From a balance of payments perspective however, the fact that the reserves/import ratio is not falling perhaps provides some indication of why a genuine balance of payments crisis has not forced the Central Bank of Nigeria to abandon its commitment to keeping the currency at N200/$1 on the interbank market,” they added.

The price of West Texas Intermediate crude oil, the US benchmark, rose to $34.13, while the price of Brent crude, the global benchmark, rose to $36.62.